American businesses would be asked to register with the federal government to create an inventory of greenhouse gas emissions and be eligible to trade emission “credits” according to a program announced by President George W. Bush on February 14. The new program is designed to be an economy-friendly alternative to the repudiated Kyoto Protocol, but critics say it could lead to mandatory caps on emissions.
Greenhouse gases tied to GDP
Under the new program, the Bush administration believes America can cut its greenhouse gas intensity per unit of gross domestic product by 18 percent over the next 10 years. The plan would not impose an arbitrary ceiling on America’s total carbon dioxide emissions, but would work toward ensuring that whatever economic activity occurs would be more greenhouse gas friendly than is currently the case.
Companies registering for the voluntary program would report their greenhouse gas output, be allowed to trade newly created greenhouse gas credits with one another, and have the inside track for economic incentives to reduce greenhouse gas emissions.
The White House estimates the U.S. will produce 183 metric tons of greenhouse gas emissions per million dollars of gross domestic product in 2002. According to the President’s new goals, the U.S. would emit just 151 metric tons per million dollars of GDP by 2012. The total amount of all emissions in any given year would depend on the economy’s performance.
“Today, I announce a new environmental path for America which will benefit the entire world,” said Bush in prepared remarks. “This new approach is based on the common-sense idea that sustainable economic growth is the key to environmental progress because it is growth that provides the resources for investment in clean technologies.”
Whitman announces Climate Leaders
Environmental Protection Agency Administrator Christie Whitman on February 20 launched Climate Leaders, a key component of the President’s new policy.
Companies participating in the Climate Leaders program volunteer to complete a corporate-growth greenhouse gas inventory and work with EPA to set an emissions reduction target. The companies will report their emissions of six greenhouse gases from all major on-site locations and emissions related to the electricity they purchase. The EPA will then work closely with the companies to develop customized reduction targets that exceed their business-as-usual performance.
Announcing the charter members of Climate Leaders, Whitman stated, “the companies that participate in this program–promising to meet a higher standard than other companies in their sector–are showing true leadership as environmental stewards. They are proving that doing what is good for the environment is also good for business. They are providing an example to everyone that we all must do our share to address the effects of climate change–and we must start now, as they have.”
The Climate Leader charter members are:
- Bethlehem Steel Corporation
- Cinergy Corporation
- FPL Group Inc.
- General Motors Corporation
- Holcim Inc.
- Interface Inc.
- Lockheed Martin
- Miller Brewing Company
- Norm Thompson Outfitters
- S.C. Johnson & Son, Inc
Criticized from all directions
Despite the high hopes of the Bush administration, the President’s proposal received criticism from many directions.
“The United States can and should lead the world to a clean technology future,” stated defeated Presidential hopeful Al Gore. “Unfortunately this plan abdicates the responsibility instead of accepting it.”
Senator Joe Lieberman (D-Connecticut) expressed disappointment that Bush’s proposal did not mirror the controversial provisions of the Kyoto protocol. “The key point is to do something meaningful. The great disappointment is it offers no real hope or progress. It’s not meaningful,” said Lieberman.
Jennifer Morgan, climate policy director for the World Wildlife Fund, called the President’s February 14 proposal “a valentine to the coal and oil industry that will allow emissions to increase without any time frame, externally.”
Command-and-control environmentalists were not the only ones disappointed in the President’s proposal. Market-oriented environmentalists criticized the plan as unnecessary and carrying hidden risks.
“President Bush’s new climate change initiative is a baffling reversal of previous statements made when he rejected the Kyoto Protocol,” stated Paul Georgia of the Competitive Enterprise Institute (CEI). “His reasoning at the time was that the scientific evidence was insufficient to justify embarking on a course of action that would cost the U.S. economy hundreds of billions of dollars a year. … If anything, the scientific basis for global warming has weakened since that decision.”
Moreover, the long-term implications of Bush’s program, stated Georgia, are potentially severe. “Under President Bush’s plan, companies that voluntarily agree to reduce carbon intensity will receive credits from the government. These credits are potentially worth billions of dollars, but are virtually worthless unless a mandatory cap on greenhouse gas emissions is forthcoming. In effect, Bush’s plan would create a business constituency favoring a mandatory cap, putting the U.S. right back where it was when Al Gore signed the Kyoto Protocol.
“Moreover,” Georgia continued, “any company that doesn’t ‘voluntarily’ participate will be hurt when mandatory caps are put into place, meaning that companies that are able will have little choice but to join the fray.
“It’s unfortunate that President Bush has decided to put into place a regulatory framework to reduce greenhouse gas emissions, giving new life to a dead issue,” concluded Georgia.
“This only reaffirms the obvious fact that any ‘voluntary system’ will soon become a mandate,” agreed CEI’s Christopher Horner.
James Glassman, a fellow at the American Enterprise Institute and host of TechCentralStation.com, lamented, “Starry-eyed over the beauty of trading, the administration’s economists have lost sight of the justification for the mechanisms in the first place. Carbon dioxide levels are supposed to be increasing temperatures on Earth. But the research … has never found a conclusive link between human activity and global warming. Satellite observations over the past quarter-century show no increase in heating just above the Earth’s surface.”
Administration claims proposal “just right”
In announcing its proposal, the Bush administration followed closely a “gradualist approach” to greenhouse gas issues, outlined by Glenn Hubbard, chairman of the President’s Council of Economic Advisors, in an October speech at the Massachusetts Institute of Technology. Hubbard argued at MIT that the best long-term approach to greenhouse gas emissions would entail “stabilizing” carbon dioxide levels in the atmosphere without “large upfront costs.”
White House Spokesman Ari Fleischer expressed confidence that criticism from all sides indicated Bush had nailed the bulls-eye with his new program.
“It’s a classic case of where some in the environmental community say the President doesn’t go far enough and many in the business community say the President is going too far. I think that’s probably an indication that the President has gotten it just right,” said Fleischer.
For more information …
The Heartland Institute has compiled an extensive collection of research and commentary on President Bush’s global warming initiative. Point your Web browser to http://www.heartland.org/warming.htm.